SB347 By Senator Barfoot RFD Finance and Taxation Education Rd 1 05-MAY-20

SYNOPSIS: This bill would provide that the income of a member of the U.S. Armed Forces would not be subject to state income tax if the member of the Armed Forces is a legal resident of this state and the member of the Armed Forces is stationed for active duty purposes outside of this state during the tax year unless the member of the Armed Forces is physically present in this state for six months or more during the tax year.

A BILL TO BE ENTITLED AN ACT

Relating to income tax; to exempt a resident of this state who is a member of the U.S. Armed Forces and a legal resident of the state from income tax when the member of the Armed Forces is stationed outside of this state during the tax year unless the member of the Armed Forces was physically present in this state for six months or more during the tax year.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:Section 1. Section 40-18-3 of the Code of Alabama 1975, is amended to read as follows:

§40-18-3.

"The salaries, fees, commissions or other income of officers or agents of the United States or its agencies and instrumentalities or its contractees, received from the United States or from its agencies and instrumentalities, shall be subject to income taxes levied by the State of Alabama as other income is taxed, but without discrimination, and only to the same extent and in the same manner as other income is taxed, insofar as the State of Alabama may be constitutionally or legally authorized to tax such income; provided, that money paid by the United States to a person as compensation for active service as a member of the armed forces Armed Forces of the United States in a combat zone designated by executive order of the President of the United States shall not be subject to income taxes levied by the State of Alabama for the calendar year 1965 or any subsequent year and money paid by the United States to a person who is a legal resident of this state as compensation for active service as a member of the Armed Forces of the United States when the member of the Armed Forces was stationed outside of this state during the tax year shall not be subject to income taxes levied by this state for the calendar year 2020 or thereafter, unless the member of the Armed Forces was physically present in this state for six months or more during the calendar year."

Section 2. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.

Income Tax

Taxation

Military

Revenue Department

Code Amended